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1965 DIGILAW 136 (BOM)

RUSTAMJI JALL v. GENDALAL COTTON MILLS LTD.

1965-08-31

D.V.PATEL

body1965
JUDGMENT.-In this revisional application, the petitioners seek to challenge the order of the learned Civil Judge, Senior Division, Jalgaon, granting leave to the two opponents who are liquidators of Gendalal Cotton Mills Ltd. to sue as paupers. 2. As this is a pauper matter, the question of court-fee is involved. The Government Pleader appears in the matter to-day as he came to know of it. He waives notice and wants to appear in the case. I grant gift permission to appear. 3. The said company, viz. Gendalal Cotton Mills Ltd., stopped working on July 29, 1954, and a petition was presented for winding it up on the same day in the District Court. The order for winding up was made on November 3, 1954, and a liquidator was appointed. The liquidator can advocate of that Court. As he could not carryon the proceedings, he resigned on May 8, 1955. On June 6, 1955, the two opponents, namely, opponents Nos. 1A and 1B, were appointed joint liquidators. The petitioners are the trustees under a debenture trust-deed created by the company on December 31, 1953. Debentures were issued by the then directors of the company with the sanction of the Controller of Capital Issue. The liquidators filed the print application for leave to sue in forma pauperis on December 30, 1956. The sum and substance of their allegation was that the debentures were issued and the trust deed was executed as a result of collusion between the petitioners and the directors of the Company and that, therefore, the trust deed was void and inoperative. The liquidators on that footing claimed possession of the asset of the Company which were shown in the Schedules to the application. They also claimed a sum of Rs. 15,00,000 as past damages for the use and occupation in lieu of rent of the factory. The liquidators prayed that as they had not sufficient assets of the company in their possession to pay the court-fees they should be allowed to sue in forma pauperis. The court fee payable is about Rs. 12,500. 4. The petitioners contended that as the liquidators were suing on behalf of the company which was not a person, such an application was not competent under the Civil Procedure Code. The court fee payable is about Rs. 12,500. 4. The petitioners contended that as the liquidators were suing on behalf of the company which was not a person, such an application was not competent under the Civil Procedure Code. This contention was accepted by the Civil Judge, Senior Division, but Mudholkar J. in a revisional application to this Court held otherwise and remanded the matter for disposal on other points in accordance with law. At the trial, it was proved before the learned Judge that the liquidators had, during the pendency of the application, more than Rs. 13,000 in their possession. The learned Judge held that, inasmuch as on the date when the application was being decided, that amount was spent by the liquidators, they were entitled to ask for leave to sue in forma pauperis. He also directed the petitioners to pay costs of the liquidators and their own upto the stage of the revisional application decided by the High Court. This decision is sought to be challenged in this petition. 5. Mr. Mistree on behalf of the petitioners contends (1) that inasmuch as it was proved that during the pendency of the application, more than a sum of Rs. 12,500-the actual amount of the court fee leviable on the claim-had come in possession of the liquidators, the Court had no jurisdiction to. grant them leave to sue in forma pauperis; (2) that the creditors and shareholders in a meeting unanimously refused to contribute to the expenses of the suit, which showed that they were not in favour of prosecuting the suit; and (3) that as the liquidators had not filed a schedule of the property as required by the provisions of O. XXXIII, r. 2, the application ought to have been rejected in limine, relying upon the decision in Ramniklal v, Mathuralal1. 6. It is not necessary for me to consider the last two points, as it appears to me that the first contention made by Mr. Mistree is a formidable one and must be allowed. 7. Order XXXIII deals with an application for leave to sue in forma pauperis. Rules 2 and 3 prescribe respectively the contents of the application and the method of presentation of the application. Mistree is a formidable one and must be allowed. 7. Order XXXIII deals with an application for leave to sue in forma pauperis. Rules 2 and 3 prescribe respectively the contents of the application and the method of presentation of the application. Rule 4 provides that the Court may examine the applicant if the application is otherwise proper, and r.5 relates to the rejection of the application, and so far as relevant is worded thus: “The Court shall reject an application for permission to sue as a pauper(a) (b) where the applicant is not a pauper, or (c) where he has, within two months next before the presentation of the application, disposed of any property fraudulently or in order to be able to apply for permission to sue as a pauper." Rule 9 relates to dispaupering of an applicant who is allowed to sue as pauper, and it provides three grounds for dispaupering--(a) if he is guilty of vexatious or improper conduct in the course of the suit, (b) if it appears that his means are such that he ought not to continue to sue as a pauper, (c) if he has entered into any agreement with reference to the subject-matter of the suit under which any other person has obtained an interest in such subject-matter; 8. The scheme of these -Rules appears to be this. The first requirement is that, on the date of the application, the alleged pauper must really be a pauper as defined in these rules. Secondly, it would appear that, in spite of his being a pauper on the date of the application as defined, if within two m6ntbsiiext before the date of the making of his application, he is guilty of conduct as mentioned in et (c) of r. 5, his application has to be rejected. Thirdly; "the application, is rejected if the applicant is shown not to be a pauper. Fourthly, in any event, even if he is allowed to sue as a pauper, if he is shown to be not a pauper during the pendency of the limit, then also the applicant is to be dispaupered. Thirdly; "the application, is rejected if the applicant is shown not to be a pauper. Fourthly, in any event, even if he is allowed to sue as a pauper, if he is shown to be not a pauper during the pendency of the limit, then also the applicant is to be dispaupered. The rules deal with a pauper-plaintiff right from the beginning until the end, and it will be clear, therefore, that if the applicant is not a pauper either during the time that the application is pending before the Court for decision or at the time when the order is being pronounced, he is not entitled to the leave to sue as a pauper. 9. Mr. Chitale contended that cl. (c) of r. 5 which refers to his means within two months prior to the date of his making the application, would show that the Court is concerned with the fl1Ct whether or not he had means to pay the court-fees on the date of the application and is not concerned with what happens subsequently. Having regard to the scheme under the three provisions referred to above, it is impossible to accede to this contention. It appears that as the pauper receives a concession in the filing of the suit and the subsequent prosecution of it, the Legislature has been careful to provide for all contingencies-and has provided that if he is not a pauper, he is not entitled to sue as pauper, and the words "is not a pauper" are applicable to his being not a pauper either during the pendency of the application or at the date when the order is made. If this condition is established, then the Court would have no jurisdiction to grant the applicant leave to sue as pauper in view of the mandatory language of r. 5 which says that the application shall be rejected. This view was taken in Gadigi Muddappa v. G. Rudramma,2 by Napier J., and with respect rightly so. 10. Mr. Chitale contended that the contention relates to a pure question of fact and, therefore, ought not to be gone into in a revisional application. In order to decide the matter, it is not necessary for this Court to deal with questions of fact. 10. Mr. Chitale contended that the contention relates to a pure question of fact and, therefore, ought not to be gone into in a revisional application. In order to decide the matter, it is not necessary for this Court to deal with questions of fact. The finding of the learned Judge is very clear and unequivocal, for he says in paragraph seven of his judgment that on March 30, 1958, the liquidators had more than Rs. 12,500 in hand. How the liquidators expended that amount cannot fall for consideration, nor is the fact whether the money was spent by them with the leave of the Insolvency Court, relevant. In this connection, it may be mentioned that the liquidators have received a large amount of Rs. 5,000 and more towards their remuneration. I am not impressed by the contention of Mr. Chitale that the amount must be available for filing the suit, and in this case it was not available because it was spent under the orders of the Court. If the liquidators had not asked for permission to appropriate the same, it would have been available. They were not entitled to pay any amount except such as had strict priority in law. They certainly were not entitled to take Rs. 5,000 or more for their remuneration, as the liquidators are not entitled to remuneration until all other expenses are met and there is surplus. The Insolvency Court did not even go into the question of priorities at all. The fact remains that, during the pendency of this application, the liquidators were in possession of more than Rs. 12,500, and if that is so, clearly, they could not be allowed to sue as paupers. As, the question is one of jurisdiction, there can be no doubt that the Court is entitled to interfere with the order. II. I may mention that it was contended before me by the learned Government Pleader that the opponents had approached the Government for financial help to enable them to challenge these transactions. The Government after fully investigating the matter refused to render any help. There is no reason, therefore, to allow them to sue as pauper. It is not necessary for me to consider this aspect of the matter. 12. The Government after fully investigating the matter refused to render any help. There is no reason, therefore, to allow them to sue as pauper. It is not necessary for me to consider this aspect of the matter. 12. I accordingly set aside the order made by the learned trial Judge and reject the petition of the liquidators for leave to sue in forma pauperis. The liquidators will pay costs of this revisional application and also costs of the trial Court. 13. I grant two months time to the liquidators to pay the court-fees if they so choose and proceed with the suit. The Court may, if appropriate circumstances exist, extend the time further for payment of court-fees. (The rest of the judgment is not material to this report). Application allowed; time to pay court-fee given.